Approach Paper for the Twelfth Five Year Plan - of Planning ...

34 Approach to the Twelfth Five Year Plan
Capacity Creation
3.26 The Eleventh Plan had targeted creation of 78.7 GW of additional capacity for grid power. Actual
realization may not exceed 50 GW, largely on account of slippages in public sector projects. The shortfall
in achieving the targets has been primarily due to poor project implementation, inadequate domestic
manufacturing capacity, shortage of power equipment, and slow-down due to lack of fuel, particularly coal.
More than 80,000 MW of new power capacity is already under construction. Hence it may be reasonable
to target 1,00,000 MW of new power capacity during the next Plan. This will, however, need an effective
resolution of issues holding up domestic production of coal and effective measures for improving financial
health of power utilities. The Twelfth Plan should, therefore, aim at capacity creation of about 100 GW,
which will include 28 GW of capacity from projects which were supposed to be completed in the Eleventh
Plan, but are now expected to be completed in the first two years of the Twelfth Plan. We must ensure that
not only the spill-over projects from the Eleventh Plan are completed at the earliest, but that slippages
in the capacity addition programme for the Twelfth Plan are minimised. In addition, we should examine
whether it is possible to back additional gas-based power capacity for initiation/completion during the
Twelfth Plan, given the competing demand from the fertiliser sector.
3.27 The share of the private sector in capacity expansion has gone up substantially in the Eleventh Plan
and it is expected that 33.0 per cent of the total incremental capacity will come from the private sector.
In the Twelfth Plan, this share is expected to increase further to about 50.0 per cent. Since most of the new
power capacity will consist of thermal plants, it is essential to ensure that coal availability does not become
a constraint. This is a serious problem as discussed below.
3.28 India has a substantial potential for creating hydropower capacity, especially in the North Eastern
region. The pace of capacity creation in this area has been slow and it is vital that special emphasis be given
to expedite environmental and other clearances, so that the pace of work on these hydro-electric power
projects can be stepped up. Early completion of these projects will also generate an income stream for the
North Eastern States which will enable them to accelerate the pace of development.
3.29 It is also necessary to take measures to increase the share of gas based power and also of nuclear
power. Safeguards in respect of the latter will be further reviewed and additional measures taken as
required. Both these are areas with great potential and will need investments.
Transmission
3.30 In order to support the large expansion in production and consumption of electricity, the
transmission and distribution network will have to be significantly expanded and strengthened. Some
private sector investments have been made in transmission in the Eleventh Plan and it is important to build
a policy framework within which more private sector investments will be forthcoming in the Twelfth Plan.
A special project on power evacuation from the North-East will have to be undertaken. The possibility
of such lines passing through Bangladesh could be considered reflecting our mutually beneficial interdependence.
Technological development for transmission lines of 765 KV and over 1,000/1,200 KV is of
great relevance in order to reduce land requirement and also transmission losses.
Distribution
3.31 The distribution segment in the power sector is clearly the weakest link in the power system. The
current losses of distribution utilities before accounting for State subsidy are approximately Rs. 70,000